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The U.S. Department of Education, under the Biden administration, frequently announced the student debt forgiveness for numerous borrowers via various aid initiatives and repayment strategies.
Changes to Federal Student Loan Forgiveness Under Trump Administration
That trend has shifted under President Donald Trump.
During his initial months in office, Trump, a long-time critic of education debt relief, signed an executive order intending to curb eligibility for the widely used Public Service Loan Forgiveness (PSLF) program. His Education Department also modified certain student loan repayment plans to eliminate the option of eventual debt discharge.
Malissa Giles, a consumer bankruptcy attorney in Virginia, noted that the administration is attempting to restrict PSLF credits and is launching direct attacks on income-driven repayment plans that include forgiveness provisions.
Here’s what borrowers need to know about the current landscape of federal opportunities for student loan forgiveness.
Reduced Forgiveness Prospects on Repayment Programs
Experts suggest that the Biden administration’s new student loan repayment initiative, Saving on a Valuable Education (SAVE), is unlikely to survive under President Trump. A U.S. appeals court already suspended the plan in February following a challenge led by the GOP.
SAVE included two significant features that became the focus of lawsuits:
- Lower monthly payments compared to other federal repayment plans.
- Accelerated debt cancellation for those with smaller outstanding balances.
Giles anticipates that SAVE will be dismantled through the courts or by administrative action.
The Education Department, under Trump, is now asserting that the 8th U.S. Circuit Court of Appeals ruling mandates the cessation of loan forgiveness under repayment programs extending beyond SAVE. Consequently, the Pay As You Earn (PAYE) and Income-Contingent Repayment (ICR) options will no longer discharge debts after a specified duration.
Income-Based Repayment (IBR) Plan
Higher education expert Mark Kantrowitz indicates that at least one repayment plan still provides a path to debt discharge: the Income-Based Repayment (IBR) plan.
Kantrowitz explained that if a borrower enrolled in ICR or PAYE later switches to IBR, their prior payments under the other plans will count toward loan forgiveness under IBR, provided they meet the IBR’s other stipulations. (Some borrowers might find this strategic if ICR or PAYE offers a lower monthly payment than IBR.)
Public Service Loan Forgiveness (PSLF) Program’s Status
Despite Trump’s executive order in March aiming to limit eligibility for PSLF, the program remains operational. Alterations to the program are anticipated to require months or longer to implement and might even necessitate congressional approval, according to experts.
PSLF, signed into law by President George W. Bush in 2007, enables many employees of non-profit and governmental organizations to have their federal student loans discharged after a decade of payments.
Consumer advocates also emphasize that any modifications to PSLF cannot be applied retroactively. This implies that if an individual is currently employed by, or has previously worked for, an organization that the Trump administration subsequently disqualifies from the program, they will still receive credit for that period, at least until the changes take effect.
Currently, the language within the president’s executive order is fairly broad. As a result, the precise types of organizations that will no longer qualify as eligible employers under PSLF remains uncertain, according to experts.
However, during his initial months in office, Trump has focused on immigration, transgender and nonbinary individuals, and those involved in promoting diversity across the private and public sectors. Many non-profits operate within these domains, offering legal support or engaging in advocacy and educational initiatives.
For those pursuing PSLF, Jessica Thompson, senior vice president of The Institute for College Access & Success, recommends printing a copy of their payment history from StudentAid.gov or requesting one from their loan servicer. She advises that borrowers maintain a record of the number of qualifying payments made to date.
Thompson advises borrowers to retain all documentation related to their payments, payment counts, and employer certifications to ensure they possess the required information in the future.
Additional Loan Cancellation Options to Explore
Federal student loan borrowers continue to be eligible for numerous other opportunities for student loan discharge.
The Teacher Loan Forgiveness program offers up to $17,500 in loan cancellation to individuals who have worked full-time for complete and consecutive academic years in a low-income school or educational service agency, subject to other requirements stipulated by the Education Department.
(It is important to note that this program cannot be combined with PSLF, so borrowers must decide which option is most appropriate for their situation.)
Under certain circumstances, borrowers may be eligible for a full discharge of their federal student loans through Borrower Defense if their school closes while they are enrolled, if they were misled by the school, or if they did not receive a quality education.
Borrowers may qualify for a Total and Permanent Disability discharge if they have a mental or physical impairment that is severe, permanent, and prevents them from working. Proof of the disability can be provided by a doctor, the Social Security Administration, or the Department of Veterans Affairs.
Given the federal government’s adjustments to student loan forgiveness measures, experts also suggest borrowers investigate the numerous state-level assistance initiatives available. The Institute of Student Loan Advisors maintains a database of student loan forgiveness programs organized by state.